A year on from their introduction, the Agency Workers Regulations (AWR) are thought to have cost organisations more than £1.5 billion in administration costs, but have not increased benefits for workers, according to the Confederation of British Industry (CBI).
The regulations, which were introduced 1 October 2011, give agency workers entitlement to the same basic employment and working conditions as permanent staff after a 12-week qualifying period.
Neil Carberry, director of employment at the CBI, said: “The regulations are thought to have cost employers more than £1.5 billion in their first year, but temporary workers have not reaped the rewards.
“Instead, the vast majority of this cost has paid for paper-pushing to ensure compliance. This has, in turn, led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired.”
Employers are required to provide the worker’s agency with its terms and conditions, which is where the additional administrative burden has arisen, said Stefan Martin, employment partner at law firm Allen and Overy.
“The regulations have had an impact in terms of additional burden for both employers and agencies,” he added. “There is a reasonably significant amount of administration required to provide the agency with information about pay and benefits for equivalent permanent staff, so the agency can then decide whether to pay the temporary agency worker any greater amount of money based on what a direct-hire employee at the organisation receives.
“It has resulted in additional administration, with the employer having to supply the information and the agency having to calculate pay.”
The CBI has identified several key areas where the government should focus its efforts to simplify AWR, including:
- Streamlining the complex definition of pay to allow for easier comparison.
- Simplifying the 12-week qualification period so that those on short-term assignments are not needlessly caught up in the regulations.
The government will be reviewing the paperwork obligations of AWR in 2013.
